Trying to predict the future can be a very humbling exercise. Just ask Thomas Malthus. Confronted with large scale population growth at the end of the 18th century, the eminent Cambridge economist predicted the world would essentially consume itself as there was not enough food to feed the growing population, which would lead to widespread famine, disease and ultimately societal decline. Although similar apocalyptic prophecies still exist today, the world’s population has grown to over 7 billion compared to just 1 billion in 1800, and life expectancies keep rising.
1994 was a year which many bond investors would like to forget, as bond markets crashed and many investors suffered huge losses in what subsequently became known as the ‘Great Bond Market Massacre’. Many now fear a repeat of 1994 with 10-year US Treasury yields rising by almost 1% since the start of May, eerily matching the early stages of the 1994 sell-off.
Back in the 1980s, Japan was the role model for global economic policy makers. It was seen as having achieved the most effective mix between free market and social structures and had the best potential for longer term sustainable growth rates.
With companies facing increasing financial challenges and with anticipated legislative changes which may reduce the security of retired members’ entitlements, individuals holding Defined Benefit (‘DB’) pensions in company schemes should give serious consideration to the alternative Approved Retirement Fund (‘ARF’) option before making any retirement decisions.
America is slowly emerging from the worst economic downturn since the Great Depression. Despite predictions of its demise as the world’s greatest superpower, we expect the US to reassert its economic and financial prowess over the next decade.
Through the development of new technologies such as hydraulic fracking and horizontal drilling, America is on the cusp of an energy renaissance. In time, a move toward energy self-sufficiency will yield numerous advantages for the US economy.
With the knowledge that the current pension tax relief regime is being reviewed, 2013 may be the last opportunity for individuals to accumulate a fund of up to €2.3 million; and/or take a pension lump sum of up to €575,000.